The Hindu Business Line : Govt may allow FDI in cargo airlines

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New Delhi Feb. 5 While foreign airlines continue to be kept out from picking up stake in Indian aviation companies, the Government is now considering a proposal to allow foreign airlines to pick up a minority stake in domestic cargo airline operations.

"The Ministry has proposed allowing 100 FDI in sea plane, helicopter operations and setting up of Maintenance Repair and Overhaul (MRO) facility. Besides, we are also considering whether to allow foreign airlines to pick up a stake of up to 49 per cent in cargo airline," the Minister for Civil Aviation, Mr Praful Patel, said here on Monday on the sidelines of an international conference.

At present the FDI limit in cargo operations is pegged at 49 per cent but as in the case of civil aviation, foreign airlines are not allowed into this.

The thinking in the Government is to raise this 49 per cent limit to 74 per cent and possibly allow foreign airlines to pick up 49 per cent stake under the overall 74 per cent ceiling. These proposed changes in the FDI limits would be sent to the Union Cabinet shortly for their approval, Mr Patel added.

Earlier addressing an international conference on `Meeting India's infrastructure needs with public-private partnerships: The international experience and perspective,' the Minister said that the Government could look at allowing private greenfield airports provided the promoters had enough land to develop them.

"In the near future we also need to look at the possibility of having a second airport in non-metro cities. This will be necessitated as most existing airports do not have any place to carry out any extension work like constructing secondary runways," Mr Patel said.

To bring about better utilisation of existing airstrips around the country, the Government was planning a meeting with Chief Ministers, the Minister said.

"We could look at the possibility of bundling airports and giving them out on lease through a public-private partnership model," Mr Patel said.

The Minister also hinted at the introduction of a cess to fund future development of the sector.

"No decision has yet been taken on the quantum and the date for imposition of the cess. But this is some that has been suggested by the Naresh Chandra Committee report and can be considered," Mr Patel said.

Commenting on the business possibilities in the sector, the Minister said that the country was likely to attract $50-$70 billion investments over the next few years.